he's fleeing to belgium. tomorrow, i will be live in washington, d.c. "closing bell" is next. hi, everybody. we enter the final stretch. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. >> minor gains once again. i'm bill griffeth. other stories we're following, the white house and big labor have been meeting on the fiscal cliff today. taxing the rich, certainly a big topic of discussion. then tomorrow business leaders will have their say. the president will have the latest on that coming up. >> two big and exclusive interviews coming up. cisco ceo coming with me on the show as soon as earnings come out. that will be at the top of the next hour. and nyse ceo with us giving us

an update two weeks after sandy historically closed sandy for two days. >> still a miracle they got things open when they did. we're oall following the latest in the general petraeus scandal. unbelievable twists, even today. we have a roreport from washington. then, more on how this story is shedding light on how anything you write can be accessed. pretty scary stuff and something to think about. >> really. in the markets right now, fractional gains right now. the dow jones industrial average off the best levels of the afternoon, but still showing a gain of about 17 points. looks like investors wait and see until we get some solutions on the fiscal cliff. nasdaq is negative by a fraction. down about four points. off of the worst levels, by the way. s&p 500 is up about 3 3/4 points at 1383. >> in today's "closing bell" exchange, we have carol roth,

bruce mccain, and our own rick santel santelli. rick, i'm going to start with you today because we see that stutter step opening in the u.s. stock market. some of that could be attributable, i guess, to the plunge in spanish ten-year yields when rumors got out that maybe spain was going to ask for a bailout from the ecb. while we obsess so much on the fiscal cliff, the markets are paying close attention to what's going on in europe, yes? >> oh, well, i don't disagree. nothing gets past you, bill. i think the fiscal cliff for lack of any tangible movement there is up and center. look at the chart bill is referring to. at one point, we were up eight basis points on the ten-year in spain. by the end of the session, down three. the following charts might put a better face on it. if to you open the chart up to about a month, you can see that rates for the most part were about a one-month high in spain. if you look at their safe harbor counterparts, the exact mirror

image of lower rates. the rumor is, hey, if you build it, a bailout facility, they will come. spain may be on their way, but it's still only rumor at this point. >> steven, how much of a factor is the europe story? are people talking about had this? what are you hearing from clients in terms of how the money is moving? >> you know, the europe story, it is important. spain had been on the back burner. greece is uncertain. the fiscal cliff, which is a series of hills, not a cliff, and a monetary cliff, which no one is talk, those two things are really what traders are talking about. >> monetary cliff being when the federal reserve has nowhere else to go? >> the expiration of operation twist comes at the end of the year. we're hoping we get some kind of hint about what they'll say. >> wait and see, bill. >> then, ms. roth, there's that fiscal cliff. you think things get worse before they get better. >> i do. i anticipate there's going to be some kind of a bargain, but i don't think it will be a grand

bargain. that's what concerns me the most. if you look at all of the tax hikes as a percentage of gdp, they're talking about 3% of gdp. i think even if they claw that back to 2%, that's going to be a huge problem. there was a great article this weekend. back in 1969 was the last time we saw a tax hike that was greater than 1%. what happened? we went into a recession. we also had unemployment that went from under 4% to over 8%. i'm afraid the political rhetoric gets in the way of economic common sense here. >> is there any consistency, steven, in terms of where the money is moving? do you see consistent buyers in specific groups in any way? is this all wait and see? >> you know, we've seen buying in transports. surprisingly enough, nobody is talking about them. it's one group that's been outperforming. it's probably largely due to the lower cost of oil we've seen. they were hurt when oil was rising. that is a place where people have been hiding for the time being while everyone is trying

to play it close to the vest. so many people aren't sure of what to do. >> bruce, you're looking beyond the fiscal cliff. you're taking a longer-term view in all of this. you like what you see. is that right? >> absolutely. we usually look with a 12 to 18 month horizon because a lot of our clients are taxable. when you look at the fiscal cliff, we think it will be resolved. the uncertainties we'll face will probably drive prices lower short term, but that doesn't change necessarily the economics next year. we think that will improve. based on monetary easing through the emerging countries and some of the countries in europe. so we would use it as a buying opportunity. >> i guess maybe carol has some things she'd like to sell you. >> how about a bridge? >> exactly. i think that you may end up seeing unemployment rates going up. i deon't necessarily think once this is resolved everything will be okay all of the sudden. i'm much more bearish. >> bruce? >> we would agree things are not

going to be okay. the question is whether they'll be better than they have been. we think that the trends will improve. we don't think that there will be an outright recession. >> i really want to zero in on dividend payers for a moment here. do you have a strategy going into year end, bruce, with dividend payers as everyone looks for yield? of course, we're waiting for taxes to go up. what's the strategy going into year end amidst the unknowns? >> it's a little harder to deal with dividend payers as a class. i think certainly any company that has fundamentals that are questionable and also is a high dividend payer, it's probably a good look for alternatives to those. we're a little more concerned with respect to how you handle accumulated capital gains and particularly the idea of doing heavy gifting this year before

the tax law changes and makes that less advantageous. >> meantime, rick santelli, while we wait for some resolution to the fiscal cliff, just in case people are still buying treasuries as yields go lower, right? >> oh, yeah. as a matter of fact, i don't think the outcome of the fiscal cliff -- we know it will get resolved. it's a question of how many debits the old buick gets before we drive it out of the fiscal cliff showroom. in the big picture, taxes are for sure going to be higher. we just don't know how much or which ones. that just isn't going to play well economically if you're a person looking for gdp other than beating taxpayers over the head with a baseball bat. >> good to see you all. thank you for your thoughts today. thanks for being with us today. >> thanks so much. meanwhile, shares of financial services company mbia plunging just in the last hour. let's get the story. >> take a look at this chart. mbia shares dropping 15%. this is because there's been a

move in an ongoing legal battle. essentially, bank of america is offering to buy a bunch of mbia debt, which of course, mbia being a mortgage immunity bond insurer. this is to wall off a troubled unit and improve the finances of its parent company. if this goes through, mbia may not make good on a number of policies, including those owned by bank of america. so its stock taking a hit on that news. again, b of a buying the debt in order to block a change in the structure that could prevent it from paying off some of those policies. back to you, bill. >> all right, mary. thank you very much. heading toward the close here. prices for stocks are coming down. so are bridge prices. >> don't go anywhere. we have a huge show ahead on the "closing bell." stay with us. coming up, bucket list. remember this? >> in terms of bringing down deductions, one way of doing that would be to say everybody

gets -- i'll pick a number -- $25,000 in credits. >> the idea for a bucket to limit tax deductions may now be gaining momentum with democrats. is this a better idea than raising anyone's rate? we crunch the numbers and tell you who will pay and who will skate. plus, game on. activision set to release what could be the biggest selling d video game ever. is this game over for the competition? and private eyes. they're watching you. we'll show you how everything you write electron click, even after you delete it, can be read by the government and you may never find out. the frightening truth about complete lack of online privacy is just ahead. also, maria means business. two major market movers, two exclusive interviews. don't miss cisco ceo john chaim bers and the nyse chief coming

up at 4:00 p.m. only on the "closing bell." i put away money. i was 21, so i said, "hmm, i want to retire at 55." and before you know it, i'm 58 years old. time went by very fast. it goes by too, too fast. ♪ but i would do it again in a heartbeat. [ laughs ] ♪ ♪ but they haven't experienced extra strength bayer advanced aspirin. in fact, in a recent survey, 95% of people who tried it agreed that it relieved their headache fast. visit fastreliefchallenge.com today for a special trial offer.

welcome back. mitt romney may have lost the presidential election, but some

democrats are warming to one of his key tax reform proposals. remember this? >> everybody gets -- i'll pick a number -- $25,000 in e ductided and credits. you can decide which ones to use. home mortgage interest deduction, childcare tax credit and so forth. you can use those in filling that bucket of deduction. >> robert frank looks at how a deduction bucket impact everything. >> the gop doesn't want to raise tax rates. many on both sides are now talking about cutting or limiting deductions to raise revenue. that would appease both parties. some argue that this would be a gift to the wealthy, but in fact, millionaires would bear the brunt of any cut in deductions. let's look at the tax policy center. if deduction were capped at $25,000, people making $1 million or more would see a tax

increase of more than $97,000. this group would could for more than 45% of that tax change. people making more than $200,000 a year would account for more than 70% of that change. the middle class, well, they would see their taxes largely remain flat with their taxes rising maybe about an average of only $800. the key here is revenue. the deduction scenario raises much more money than raising the top rate to 39.6. in fact, it would raise three times as much. this would raise more than $1.3 trillion in revenue over the next ten years. now, cutting deduction may be impossible politically, and it could disrupt the economy, but that's a lot of money, even in government terms. that's compared to only $440 billion if we raise that top tax rate. back to you giuys. >> all right. robert, stay right there. more reaction now. >> we have both sides of this

issue. not surprisingly, republican strategist justin safy says it's a good idea because it takes out the political fighting. also not surprisingly, democratic strategist is not a fan of all this. justin, make the case for the bucket of deductions that romney talked about during the campaign. >> well, you know, this idea is so simple. it's probably almost too simple for the big thinkers in washington, d.c. the point is, if you give one amount, whatever that amount is, as a cap on the deductions, the taxpayers themselves can choose which deduction they want. it takes it out of all of the fighting that goes on, the lobbyists, the different special interests that are constantly lobbying members of congress to protect certain exemptions. it makes the tax b code simple. you can't have a conversation about tax reform in the u.s. without talking about loophole reform. that's what this would be. >> so, you disagree. you're saying it's not the right approach to solve any problems.

>> it's not. it's certainly not. i think that, you know, when we're talking about something that mitt romney proposed, which he didn't really give any details throughout the entire campaign. so now that we're going back to one of his proposals after he's lost the election, i think that's, you know -- president obama called it a sketchy deal. i think there's a lot of kabooky math going on here. i don't think middle income earners should only have to get one income tax credit. it only goes up to $25,000, which means a lot of people would only be able to do one income credit and would have to give up others. >> first of all, the $25,000 is just a made up number at this point. it's not settled on. second, it was coupled during the campaign with governor romn romney's hope of further tax breaks across the board, which is not likely to happen. don't you agree that just by itself the bucket of deductions would give congress something to hide behind because they don't have to pick and choose? they let the taxpayers choose

it. as robert frank pointed out, it raises money. >> i don't think the taxpayers and people that voted in the election want congress to hide behind anything. i think we voted for a platform that wants taxes raised on high-income earners. that's what we voted for, and that's what we want. we don't want any copouts. we don't want congress to be able to hide behind anything. >> who has $25,000 in deductions anyway? >> people who have child income tax credit. it almost gets them all the way up to that $25,000. for example, students who rely on tuition credit, they wouldn't be able to do that if they were a student who had children as well. >> all right. skr justin, we got to pick on you now as well. the president feels he has a mandate. he won campaigning to do away with the tax breaks for those making more than $250,000. not politically popular for about 47% of the people in this country. don't you feel he's going to have to do something along those

lines to meet that mandate? >> look, i do, and i understand that, but at the same time, you know, in the democratic primary four years ago, he criticized the individual mandate proposal that was part of hillary clinton's reform, health care reform, but when he got elected, he adopted that idea. i'm hopeful that perhaps -- and if you listen to his speech he gave on election night, he wanted to work across the aisle, reach out to governor romney. this would be a great example for president obama to show that he means what he says when he talks about bipartisanship. to take an idea from governor romney and use it as an overall tax reform. >> yeah, i mean, the ultimate idea here is we want to extract more dollars from the wealthy as part of a shared sacrifice in entitlement cuts. what does it matter whether you label it a deduction cut or 39.6% tax increase? ultimately, you're getting more dollars from this very top group. in fact, this may even be more progressive than 39.6.

i'm a little confused as to why there's so much opposition. maybe just because romney proposed it. >> plus, you're simplifying the tax code. that's really an important part of this. you're eliminating some of those special interest fights and loopholes that exist. >> and zerlina, let's face t the election is over. obama has won. just because it was a romney idea, does it make a bad idea? >> no, i'm not saying that anything that romney proposed is a bad idea. i'm saying that it is a fact that he proposed ideas without giving any details. we haven't even really heard any of the specifics behind this particular plan, not to mention the fact that voters voted for $250,000 and above for their tax rates to go up. i think that it's not on obama. it's on republicans in congress to make concessions to get to a compromise on this deal. >> all right. well, we'll wait to see what happens. >> yes, we will. >> wait for that white puff of spoke to come out of the capitol building at some point.

>> thank you so much. appreciate it. the market has turned negative. >> this may end up being the biggest video game of all time, maria tells me. activision's "call of duty: black ops 2" is set to blow up the competition. is it the best play in the video game stock? we'll talk about that. and what was behind the latest glitch in the stock market on monday? and how about the fiscal cliff? ceo duncan niederauer among the ceos in the fix the debt commission. he's later on the "closing bell." stay with us. i was downstairs making coffee, and we heard it. it just came crashing through the roof, out of nowhere. what is it? it's our ira. any idea what coulda caused this? maybe. i just sorta threw a little money here, a little money there. and i loaded up on something my dentist told me was hot.

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shares of activision a bit lower today despite the launch of what many believe will be the biggest video game of all time. namely "call of duty: black ops 2." julia boorstin is here with more. >> that's right. it's expected to be not only the biggest joid game of the holiday season but also the biggest video game of the entire year and perhaps of all time.

activision announced this morning that preorders have shattered the records set by last year's "call of duty." that topped $400 million in sales in just its first day. that was far more than any other entertainment launch. this game is expected to sell 19 to 20 million copies this quarter in line with last year's game. last night, 16,000 retailers around the world, including 4400 u.s. game stop stores here in the u.s. opened their doors to gamers for the big launch. strong presales have prompted activision to raise its full-year revenue and earnings guidance. many say that activision is still being conservative with its expectations for the games this year. >> julia, thank you so much. so is activision a buy on the release, or is arc a better play? we're doing "talking numbers"

right now. gentlemen, nice to have you on the program. thank you so much for joining us. let's take a look at some of these charts. activision and electronic arts. >> these are two weak charts. i don't see that many technical signs of this declining. let's look at activision first. we see a very large wedge formation formed. price broke higher with strong momentum, technically like it should. however, the fundamentals ran up to it right around november of last year. they reported. the fundamentals were so poor. then we saw a 25% decline in price. we are getting close to some support from the 2010 lows, but right now there's no signs of bulls entering this. i see weakness continuing for this. >> that's activision. same with electronic arts? >> slightly different. i think that electronic arts, the bad times are behind it and we're slowly beginning to form a base. when you look at a longer-term chart, the thing that jumps out to me is this 55% decline from

the recent highs. >> what the heck happened there? >> what was very interesting is not necessarily the decline, but giant support at 14.5. this support held for multiple years. this may turn into resistance. while it's slowly moving sideways -- >> itch have to agree. >> jump n todd. >> these are no doubt beat up stocks, but the fundamentals are going the right way. i don't think they've been as good for the video game sector this cycle as they are right now. activision is going to benefit not just from "black ops," but skylander, largely off of the investors' radars. a huge kids release this holiday season. ea fundamentally has a strong outlook. i think both of the charts are weak because frankly both stocks had an overhang going into the

september quarter, which both companies addressed. >> so you would be a buyer at these levels then? >> yes. we are recommending this group into the end of the year with buys on both ea and activision. >> todd, you along with the other 85% of the analysts who cover activision have a buy on this. we keep seeing selling pressure. all the heavy volume occurs on down days. >> the issue has been product concentration and the fear of what comes next year. the company very successfully addressed that next year by saying, you know, look, we're going to guide down. that's because we had so much upside this year. but look at where they've guided to every year and look at where they've ended up. frankly, the stock did not go down on that guide down. ea, similarly, not going to have a strong holiday season. had to take the numbers down. stock did not go down there. i think these stocks are building a base here. >> all right.

we'll be watching that. certainly is what makes a market. gentlemen, thank you very much. we'll be watching those e stocks. bill, over to you. >> meantime, we're heading toward the close. selling has intensified a bit. the dow now down 26 points. looked like it was going to head back to the lows of the day. we're kind of stabilizing right here. the sex scandal involving former cia director david petraeus has opened some eyes about online privacy or the lack of it. up next, find out how the government could be looking into your e-mails right this moment. you wouldn't even know about it. then later, tech giant cisco is set to report earnings after the closing bell rings. we'll hear exclousively from ceo john chambers before he speaks to analysts. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong. tdd#: 1-800-345-2550 after that, it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan.

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welcome back. we have breaking news on the fed. over to steve liesman. >> maria, thanks. fed vice chair janet yellen saying that the federal reserve

shows optimal policy could dictate lower rates through 2016. also saying the fed could eliminate calendar date guidance entirely and replace it with economic targets. that's been discussed among others. charlie evans says she's strongly supportive of using these economic targets and they would promote automatic stabilizers, allowing the market to adjust automatically to incoming data. it would also help the public understand fed policy. also says the fed is considering forecasting optimal policy pass by individual members. so by the way, janet yellen chairs the subcommittee on communications. these are important words from an important person. on the fed and inflation, she's remiebdsing us a 2% inflation target is the central tendency, not the ceiling. if the 2% is a ceiling, what would happen is all the deviations would be below 2%. she's reiterating what the fed

has said. it's symmetrical. so maria, at the end of the day, these are important comments from janet yellen, who's the vice chair but also heads the fed's subcommittee on communications. looks like changes are coming, bill. >> looks like it. steve, thank you very much. >> sure. >> elsewhere, the sex scandal that led to the resignation of cia director david petraeus is widening and getting more troubling. >> yeah, eamon javers is at the white house with the latest on this evolving scandal. over to you. >> first of all, i'll start with acting cia director mike morell. he was talking with lawmakers today. one of the issues the senate intelligence committee is going to have to work out is whether or not david petraeus will come up and testify on thursday before the committee behind closed doors about what happened in the benghazi mess. he had been scheduled to testify. how this sex scandal and his

resignation impacts that is being resolved now on capitol hill. let me bring you up to speed on everything going on in this sex scandal. it's a sprawling scandal. the person at the center of it appears to be jill kelley. she's the tampa socialite who was involved in some kind of e-mail relationship with general john allen. he's the marine corps general who commands u.s. troops in afghanistan. the nature of that e-mail relationship has been described as possibly inappropriate, has been defended by others. we don't know what the contents of the e-mails were. jill kelley apparently was perceived as a romantic rival to paula broadwell. broadwell is the biographer of general david petraeus who has admitted she was having an affair with petraeus. broadwell apparently sent some kind of e-mails to jill kelley, either anonymously or otherwise, basically telling her, i know what you are doing. we don't know the contents of those e-mails either. but broadwell possibly viewed

jill kelley as a romantic rival. meanwhile, there's an unnamed fbi agent involved in all of this. apparently that kelley had approached and asked for his help in dealing with these anonymous e-mails. this agent also apparently became obsessed with jill kelley and was orderred off the investigation. at one point, he sent shirtless pictures of himself to jill kelley. this thing is sprawling and confu confusing. a lot of possible ini did cessions. defense officials today are denying there was any affair here between general john allen and jill kelley and saying some of the descriptions of these e-mails are mischaracterized. there's still a lot we don't know. >> it this is getting bigger. this is a much bigger story. more will be revealed. thank you very much, eamon. much of the evidence the fbi is uncovering is coming from a shared gmail account where the

parties log in separately and read drafted e-mails that were never sent. those drafts were deleted, but they were still retrieved by the government. that's very interesting. they weren't even sent. so whether it's for business or personal, do we have any privacy at all in the digital world? >> something to remind ourselves about. once again joining us on the left, there's jeremy kroll, cofounder and ceo of k-2 intelligence. on the right is julian sanchez, a senior research fellow covering technology, privacy, and civil liberties. jeremy, once again, a reminder that even though you hit the delete button, it doesn't disappear completely, does it? >> everything can be tracked, traced, monitored and recovered. if you have something really important or private, either say it in person, put it on a piece of paper, burn the piece of paper, nothing is private anymore. >> even a draft? you didn't even send the draft. >> there are two kind of people that use this technique. it's teenagers and people who read "the girl with the dragon

tattoo." this is a pretty well-known technique. it isn't super secret. it's more than what you'd expect from the average person to do, but if somebody wants it get into a g-mail account, the most e-mailed article last week in "the new york times" was how to protect your password. people are just getting a feel for out insecure their online e-mail accounts are, but they're very vulnerable. >> so they're figuring out your password. >> julian, you're troubled this investigation began to begin with. it did involve an e-mail that had unpublished information about the cia director's schedule. that right there should be enough of a red flag to begin an investigation, doesn't it? >> well, no. this is a country with more than 4 million people with security clearances. you're talking about someone who's volunteering on a base where i'm sure, you know, dozens of people have that information. the fact that someone knew a person was at an event strikes me as a fairly thin basis on which to begin a fishing

expedition through what appeared now to have been thousands of e-mails. it's one thing to say you had a series of a half-dozen catty e-mails and perhaps there's some rationale to look into that and identify as they did initially without reading the e-mails, the originator of those. seems like subpoenas, probably, to trace the ip addresses that were used to send these put paula broadwell's name on them. the question is, do you have probable cause to believe a crime has been committed? certainly once you know it's broadwell who has abundant reason to know where the subject of her biography might be on a given day, do you have probable cause to believe a crime has been committed and to believe that, again, a kind of seemingly indiscriminate search through someone's personal e-mails of a highly intimate nature is justified by that. >> here's what i want to know, jeremy. how often does the government call the googles, yahoo! and

facebooks of the world and demand data? do they even need to? >> of course, they do. people have a problem with the way civil liberties are protected here in the united states, they should move to places like pakistan and china where there's zero expectation of rule of law protecting personal information. >> is that the only choice i have? move to pakistan? >> yeah, i hope you have a higher bar than that. >> i think there is -- people have to recognize that the government makes mistakes. there's no question about it. the government is going through protocols to get information for counterterrorism, criminal activities. >> are you saying this was a mistake to begin this investigation the way it began? >> no, i think that we get involved as a private sector solution when people feel threatened. there's a physical threat. there is a financial threat of some kind. so we don't have the subpoena power as a private security firm. what we have to do is be a lot more creative. we have to look at the social media footprint of the person,

all the information they're leaving out there. we can trace ip addresses. you don't need subpoenas to do that. there are ways to conduct a parallel investigation in private, but if someone feels genuinely threatened, of course they're going to call law enforcement. there isn't anything wrong with that. i'm not sure i fully agree with the other guest. >> okay. great. >> wish we had more time, we we don't. >> you have to come back. this is a discussion that we need to continue. and, wow, a lot of information that you're gleaming on social media. we know that. we're in the final stretch here. 20 minutes before the closing bell sounds for the day. down about 23 points on the dow. >> when we come back, stocks stuck in the dog house. will that continue until we get a deal on the fiscal cliff? we're going to look at that in a moment. after the bell, fixing the debt. duncan niederauer will be with us. [ male announcer ] when it comes to the financial obstacles

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very big up day for natural gas. sharon epperson is here with that story. >> bill, it was a stunning rally that really took some traders by surprise. we've seen natural gas futures rise by about 25 cents in the last two days. the close today was the high else settlement price we've seen for the year, driving the prices higher, expectations that we will see the first withdrawal from natural gas in storage for the season as colder temperatures have started to set in. we're going to expect to see heating demand pick up over the winter. you add to that the fact there have been these expectations that we're going to see natural gas supplies really grow over the next several years. the energy information administration today saying that by 2017 or so, we will be an exporter of natural gas. this on top of what the international energy agency has said about natural gas and the fact we're continuing to grow here with our supplies. back to you. >> all right. thanks so much, sharon. of course, stocks not able to

hold on to early gains today. the market is lower right now. look at this. this market is down about 3%, just over 3% since last week's presidential election. many believe it's mainly on worries about looming fiscal cliff. >> here to help us break down the trading day, mark freeman and bob posani. what do you think? do you think we get a resolution in the fiscal cliff that will please the market? everybody believes we're going to get something. will it please the market? >> i think that's a great point. to a certain degree, i'm wondering if we're too fixated on what the details will be as opposed to saying, look, do we get an agreement? when we look at it from the market, that's what's most important to the market. just tell us what the rules are going to be. tell us what the rates are going to be. then let's move on. let's move from going to an unknown to a known. that's ultimately what i think the market cares about. >> so how much of the selling that we've seen is a reaction or

an anticipation to let me sell my winners now because the tax will be much more next year? >> i think there's certainly an element to that, but i think also it's the overall uncertainty that's playing into it. when we talk to our clients, we're really saying, look, take a longer term view and let's think about the fundamentals. this, too, will pass. >> curt, you're looking at mortgage mortgage-backed securities. is that right? >> we're looking at the fiscal cliff being the big risk. we have to keep in mind the mark has been selling off since the fed implemented qe-3. we have to keep in mind there's a bunch of different forces. we're looking a little better today because we're refocusing on earnings, which is a good sign. it's the reason why the market is up 10% this year. we agree the fiscal cliff is ultimately going to be resolved. the question is, is it going to be at the end of this year or sometime next year in the first quarter? that's hard to pin down. we think we're going to get

through this next wave of uncertainty. >> i don't know if we're looking better today. we're about to close at 3 1/2 month lows. i agree with maria. we're down, what, 400 points since the election. i'm optimistic things are going to be resolved, but if it's not, we saw in august 2011 what happened when there was problems with another kind of fiscal cliff, over the debt ceiling. forget 400 points. we dropped 1100, 1200 points in six or seven trading sessions in the beginning of august. >> that was a nightmare. >> that's why the street is freaked out. >> and the same group is in charge this time around. it's the same exact group pretty much. they're driving us up to the cliff again. i know you think we're going get a resolution. my question is, why? everybody is digging in again. these folks who say, let's go over the fiscal cliff because that's the only way we'll see movement, if we do, what kind of

damage does that do? how easy is it to reverse? >> i think it would be very difficult to reverse. i think that should not get lost on the parties in washington who are ultimately deciding this. when you look at this, in terms of saying, why do we get a deal now? i think because the stakes are so high. ultimately, the parties in washington have to realize that and say -- and put that above. i know that's a stretch when we're talking about washington. i think, again, their numbers are what they are. we are where we are from a fiscal position. it's unsustainable. >> i think we will get a res lug, by the way. >> you said it. you were right. you said after the election. not right yet. >> we'll see. gentlemen, thank you. see you later, bob. >> all right. >> heading toward the close. still near the lows of the session, down about 35 points on the dow. >> so what about all these fears about the fiscal cliff? is it starting to creep into cisco's bottom line? we're going to check in with ceo john chambers. we'll break down the company's latest earnings. >> first, another shake-up at

microsoft. that stock is really feeling the pain lately. the man behind windows 8 considered to be the successor to the ceo, he's now out. what that says about the company coming up. [ male announcer ] you are a business pro. monarch of marketing analysis. with the ability to improve roi through seo all by cob. and you...rent from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. i'm going b-i-g. [ male announcer ] good choice business pro. good choice. go national. go like a pro. since ameriprise financial was founded back in 1894,

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welcome back. we have a quick market flash from mary thompson. amd on the move. >> it certainly is. up about 8.1%. there's a report saying that the company has hired jpmorgan to explore options for the firm, including the possible sale. although, the report saying the sale is not a priority. other options for a manymd coul include a sale of its portfolio. rallying on the news. back to you. >> the old exploring their options. >> yeah. shares of microsoft meanwhile taking a beating this week. the worst dow performer today. things accelerated by the sudden departure of the head of the windows division. he was viewed as a possible successor to the ceo steve balmer. >> the selloff hasn't just been about steve. there he is. this is a guy that was considered to be the heir apparent to steve balmer.

in the last few years, steve balmer has wanted greater flexibility within the company. he wants to speed up the product cycle. other companies have product cycles that last maybe six months. microsoft's last a few years. he wants it down. here's the chart of microsoft just this month. it's down about 5%. year to date, the stock is up about 4%. it has lost 12% in the last six months. this selloff just this month is not the whole story. it's been falling since last spring. >> how about five years, bill? >> well, it's had a loss decade. >> i mean, seriously. the bottom line here, microsoft has missed so many important things in technology. blew it on the tablet. blew it on the mobile device. >> they play catchup all the time. >> now they're even losing market share when it comes to their main business. android also taking some market share there. a lot of people wonder if the

death of the pc is going to mean even worse things from microsoft. i mean, sometimes great companies are not great stocks. >> well, they're a mature company. we all know that. they're a very big company. they're a very rich company, but they're not the fastest, most entrepreneurial company. >> does microsoft, the name, resonate with your kids? >> not anymore. >> the way google, the way apple does? >> used to. xbox was big in our house. not anymore. halo 4 selling well, but it's not as big as -- we mentioned that "black ops 2" game. it's supposed to be the biggest in the world right now. it's outselling "halo 4." >> that's their key to the consumer, the video game part of the business. >> well, we'll see what's up their sleeve next. we'll take a break, come back with the closing countdown. >> then you will not want to miss the double dose of

exclusives we have in the next hour of the "closing bell." i'm talking to the cisco ceo john chambers after his earnings hit and duncan niederauer about the importance of fixing debt in america. you're watching the "closing bell" on cnbc, first in business worldwide.

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a little over two minutes left. the selling has picked up a bit here now. down about 46 points. the low of the day was down 60. yesterday we talked about the volatility index moving lower even though the fiscal cliff still looms. it continued lower today. now it's picking up with with the selloff. let's look at the dow quickly with this selloff. we had that stutter step this morning. a high, we were up about 83 points at the high of the day. now we are down about 50 points here. warren myers, what happened to the rally? >> it petered out. unfortunately, that's the way the market's been acting. there's been a little bit of a sell imbalance going into the close. that might have triggered a little of the selloff. microsoft has been down today. that might have pulled it down. beyond that, there's nothing to be super optimistic about at the moment. i hate to use the term fiscal cliff. we've heard it more than enough lately. that's still looming. >> does this become a better buying opportunity for you right

now, mark freeman? >> i think so. i think there are going to be selective names that have a combination of income in growth, and they're going to do fine. i think those are the things we're focusing on. i think you have to use this as an opportunity. we can focus on the negatives all we want. there's also something to be said for focusing on the opportunities. if it's like what we saw last summer with the debt ceiling, we're going to get opportunities. >> fiscal cliff, europe. what's more important right now? the spanish bond yields went down this morning. that's when our markets took off. >> we seem to be focusing on the fiscal cliff. right now, i put my emphasis over there. that's as important if not more in the short term. >> do you watch that at all? >> absolutely, but i would probably take the other side of the trade. i think the fiscal cliff is more pertinent here just because the numbers are so much larger. the ecb has stepped in as a backstop for europe. i think it's hard to underestimate that. >> thank you, both. we're almost a